3M Increases Dividend by 2%

Another one of the companies I own in my DRiP portfolio has announced a dividend increase. 3M Company, the maker of the Scotch brand and of the ubiquitous Post-It stickers, as well as a wide variety of industrial products worldwide, is increasing the dividend from $0.50 to $0.51 per quarter, starting with the next payment in March.

This is a small increase, just 2%, but shows that the company is confident of the future. After all, it recently reported comparable 2008 earnings of $5.17, a 3.8% increase. Actual earnings (including the special items) were quite a bit lower at $4.89 (a 13% decline), so it's a mixed picture.

That still leaves the payout ratio at an healthy 40%, so the company can easily afford to continue paying the dividends.

Since my position in 3M is quite small, that increase will have almost no impact to my dividend income (about $0.17), but it still shows that the company is solid.